Trade Closed: 2008-06-24 11:12
It looks like my trade idea was good, but I made a mistake in execution with incorrect stop placement as USD/JPY barely touched 108.20 and closing out our trade before the Greenback dropped today on weak US housing and consumer data.
Total: -35 pips/ -0.5%
The mistake was a bit psychological as I was so sure the pair was ready to drop from the resistance line that I was not cautious enough about picking the area of where the trade would no longer be invalid. So, we missed out on some good profit, but it’s a good thing we reduced position size on this short term trade.
I am not surprised to so see weak data from the US this morning, and I am confident we will see more to come as the fall out from the credit crisis continues to work itself out. Also, with unemployment and wages hurting bad, I think the Fed may focus more on the economy rather than inflation. We will have to wait and see in the upcoming Fed statement after the interest rate decision this week. Stay tuned!
Trade Idea: 2008-06-23 09:52
Good morning! Here is a quick, short-term idea on USD/JPY as the pair trends lower in a channel on the 4 hour chart.
The currency markets continue to look choppy as conditions remain uncertain on global economic growth and inflation. The Greenbacks’ strength this morning has brought the currency to the falling trendline drawn on the chart and it looks like it has found sellers once again around 108.00. This is probably mostly on technical selling as we lack event risk this morning during the US session.
So, I look to catch a few pips for today’s US trading session as I try to get in as see if the sellers will push the pair back lower towards 107.00. Also, because this is a day trade I will use half my normal position size to risk only 0.5%.
Short half normal position USD/JPY at market (107.85 or better), stop at 108.20, pt1 at 107.50, pt2 at 107.15
Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.
Good luck and good trading!